Apple’s Identity Crisis – As Earnings Decline, Investors Pay Attention to a Lack of New Products

It’s all about how Apple is positioned by investors and the marketplace.

If it continues to be seen as a hardware business, Apple’s streak—driven by products like the iPhone and iPad—could run out quickly as smartphones and tablets get commoditized and consumer tastes change. It is a lesson learned by companies like BlackBerry-maker Research In Motion Ltd., whose tech hardware was quickly eclipsed by products from Apple itself.

If Apple is classified as a software-hardware hybrid, the company could be valued more like Internet and software makers that have recurring revenue streams and that often trade at higher price-to-earnings ratios than hardware firms.

“The market views Apple as a consumer hardware company tied to product cycles that drive volatile revenue and earnings streams,” says Morgan Stanley analyst Katy Huberty. But that view isn’t complete, she says, since “Apple customers buy into a brand that offers ease of use similar to companies like Amazon.com or enterprise companies like NetApp.”

Apple has characteristics that differ from many other hardware businesses. Its customers often upgrade their Apple products annually, far more frequently than the four-year PC upgrade cycles typically found at tech hardware businesses including Hewlett-Packard or Dell.

The history of hardware companies that stayed on top through software is short. Sony Corp., 6758.TO +2.14% for instance, lost its supremacy to Apple when the Walkman couldn’t compete with iTunes and the iPod. RIM enjoyed huge sales spurred by its email service, only to have that eclipsed by Apple and its App Store.

Now, some say there are signs Google Inc. GOOG +1.91% may do the same to Apple with online services. Piper Jaffray analyst Gene Munster says Apple builds great software, but gets a “C” on software services like data syncing service iCloud.

What happens after you leave the voting booth? Matt Gagnon and Craig launched today’s discussion on the Technology of Elections following the Maine Secretary of State’s review about the safety of Maine’s voting machines. What’s up with Facebook? You’ve got to read the article about Facebook in the March Issue of Wired Magazine. Craig and […]

Have you wondered how Russia manipulated Facebook, and was able to place ads? Jim Polito and Craig delved into ongoing Russian hacking campaigns and Facebook’s plans to prevent foreign entities during future election cycles. Election machines are vulnerable, and States are talking about throwing away their newly-purchased technology. What else can they use? VPNs don’t […]

For this Saturday show, Craig talks about possibly the 'biggest leak in history' as a secret code from the iPhone was posted to Github. Also in the tech news, this week is a peek at how China's surveillance state can do when it comes to privacy, and why it should scare everyone. Plus, some good […]

Craig joins Ken and Matt this week to talk about why Apple's CEO, Tim Cook, won't let you have your kids use social media. Also in today's discussion, sensitive information is revealed by a wearable technology, and dangerous for U.S. soldiers. What is the brand of this wearable tech? These and more over at CraigPeterson.com Stay […]

What if you could take control of your phone's battery life? Joining Jim Polito over today to get more updates on how to make the most of your iPhone's battery. With reference to Apple's statement, giving their users a choice on how to handle the phone's battery life. Find out more on how […]

Craig joins Jack Heath for another Monday of technology security updates. Today Craig shares what's in store for the medical industry with the Internet of Medical Things (IoMT) this 2018. Is the medical industry ready security-wise? More tech updates over at CraigPeterson.com --- Related articles: Why The Internet Of Medical Things (IoMT) Will Start To Transform […]